Statement by

Mr. Javad Amin-Mansour

Director for Trade Negotiations and Energy

Ministry of Foreign Affairs

Islamic Republic of Iran

On

“The Role of Iran in the EU Energy Security”

During the

“International Conference on

EU and Middle East: Iranian Viewpoints”

(23-24October 2013, Bucharest, Romania )

******************

 

In the Name of God

Ladies and Gentlemen;

Dear Participants;

It is indeed an honor for me to make some remarks in this august room on “The Role of the Islamic Republic of Iran in EU Energy Security.” Before that, I would like to thank the government and people of Romania for the arrangements they have made and the warm hospitality extended to us.

 It goes without saying that “energy security” is one of the most important challenges before the European Union in the years ahead. I hope that our deliberations on energy security and other energy-related issues will lead us to further understandings and finding solutions in order to meet our common challenges.

As in the past, energy is central to human development. All energy resources have positively affected the lives of billions of people throughout the globe. And, it will remain crucial to our future economic and social developments. We see energy in the context of sustainable development and its three mutually reinforcing pillars, social development, economic development and environmental protection.

According to the figures, world population is expected to reach around 9 billion by 2035, an increase of less than 2 billion from today’s level. At present, around three billion people are living on less than two dollars and 50 cents per day; 1.4 billion people – it means: one out of five – have no access to modern electricity; and 2.7 billion people rely on biomass for their basic needs. The countless risks of some traditional energy sources, due to lack of sustainability, are well-known.

Based on the reports contained in the OPEC Energy Outlook and the IEA World Energy Outlook, as well as the other reliable sources, world energy demand is expected to rise between 33 to 50 percent by 2035, although overall shares shift over the time.

Fossil fuels, which currently account for 87% of the world’s energy supply, continue to contribute 82% of the energy consumption by 2035. Oil will retain the largest share for most of the period, reaching almost 110 million barrels a day by 2035, although its overall share in energy mix may fall to some extent. Global Coal demand increases 20 percent. Likewise, natural gas demands escalate by 50% to 5 trillion cubic meters. Therefore, Fossil fuels will remain dominant in the global energy mix and central to growth in many areas of the global economy, especially the transportation sector.

As per non-fossil fuels, renewable energy grows fast. But as it starts from a low base and depends on subsidies, its share may remain 3% by 2035. Hydro-power will increase only a little, to 3% by 2035. Nuclear power will also witness some expansion, although prospects have been adversely affected by the sorrowful events in Fukushima. It is foreseen as having only a 6% share in 2035.

As estimated, North America is supposed to emerge as an oil and gas exporter in the future, accelerating the switch in direction of international oil and gas trade. If it happens, almost 90% of Middle Eastern oil exports will be drawn to Asia by 2035. It is worth noting that there will be some challenges in this process, such as: environmental consequences and the inadequacy of shale gas and shale oil reserves, which should be taken into account.

Against this backdrop, there will be enough energy resources for consumption in the predictable future. However, the international community will face certain challenges such as: energy security, access of the deprived people to modern energy services, diversification of energy resources, technology transfer, exchange of knowledge and experiences, increase in investment to guarantee enough energy supply and transportation, predictable energy market, and stability in global economy. Moreover, as you are well-aware, several shortcomings including: the continuation of the “financial crisis”, in the United States as well as the “debt crisis” in the Euro zone has led to the economic recession and, therefore, aggravated the global economy. Without any doubt, those challenges can be prevailed only through constructive negotiations in appropriate fora and international cooperation, taking into account the national interests of all countries involved in production and consumption.

Fortunately, many governments as well as several regional and international bodies are actively engaged in energy resources management and in dialogue between the producers and consumers in order to stabilize the global energy market and maintain energy security at all levels.

The United Nations Conference on Sustainable Development, recently held in Rio, recognized the critical role that energy plays in the development process, as access to sustainable modern energy services contributes to poverty eradication, saves lives, improves health and helps to provide for basic human needs. In that Conference, the international community committed itself to facilitate support for access to these services by the people worldwide who are currently without them. The Conference also stressed on more efficient use of energy, greater reliance on advanced energy technologies, including cleaner fossil fuel technologies, improving energy efficiency and the diversification of the energy mix, including in developing countries. In spite of that, unfortunately, the Conference failed to refer directly to “energy security”, which remain a major challenge in the future and, thus, deserves enough attention of the international community.

Dear Participants;

 

As far as energy policies and energy security in European Union region are concerned, one cannot refer to it without mentioning the Union’s ambitious energy goals and targets.

The EU targets of 20/20/20 by 2020 are well known. The decision was adopted in 2007, on the basis of which the EU is supposed to reduce greenhouse gas emissions by 20%, rising to 30% if the conditions are right, to increase the share of renewable energy to 20% and to make a 20% improvement in energy efficiency. The European Council has also given a long term commitment to the decarburization path with a target for the EU and other industrialized countries of 80 to 95% cuts in emissions by 2050.

The potential for further development of EU indigenous fossil fuel resources, including unconventional gas, exists and they may play a role in the future in providing energy resources in the region.

Despite all EU energy policies and plans in the past in order not to face shortcomings in energy resources accessibility, the region has faced several times serious gas supply crises in the past which indicate Europe’s vulnerability.The crisis may take place again if policy-settings would not address the realities on the scene.

Ladies and Gentlemen

The Government of the Islamic Republic of Iran, as a main producer and exporter of oil and gas, is committed to stabilize the energy market by securing energy supply to the benefit of the global economy. My Government intends to escalate the application of all sources of renewable energies and also to utilize nuclear energy for peaceful purposes, as a part of its strategy for diversification of energy sources, maintaining energy security, and herewith resorting to less-pollutant and cleaner energy sources for the present and future generations.

As a member of Organization of the Petroleum Exporting Countries (OPEC), together with the other Member States, we will do our best to coordinate and unify our petroleum-related policies. OPEC has constantly tried to ensure the stabilization of oil markets, including in Europe, in order to secure an efficient, economic and regular supply of petroleum to consumers, provision of reasonable income to producers and a fair return of capital for those investing in the petroleum industry. I have to add that the OPEC Fund for International Development (IFID) continues to provide financial aid to the developing countries in order to enhance capacity-building in terms of income generation, raising their peoples’ living standards, health, water and sanitation, agriculture and industry. I would like to take this opportunity and inform you that Iran, as one of the major founders of the Gas Exporting Countries’ Forum (GECF), spares no efforts in stabilizing the global gas market in a manner which benefits all. We are active in development and deployment of the renewable sources of energy in the country and, as a member, participate actively in decision-making processes in the International Renewable Energy Agency (IRENA).

Given the above-mentioned policies and commitments, and having the fourth largest oil reserves and second largest natural gas reserves in the world, Iran and the EU could expand their cooperation in the field of energy resources and herewith meet the needs of each other. The connectivity between the natural gas transmission networks in Iran and Europe as well as their electricity grids connection can be fruitful to both parties. Enhancement of energy efficiency is another area for cooperation. Synergy between the EU and Iran on development and deployment of renewables such as solar, wind, biofuels, and geothermal power will help realize the ambitious plans of both sides to combat climate change and release less and less GHG emissions. Having large and hot deserts, as large as the area of France, Iran has plenty of potentials for that purpose.

Moreover, bilateral cooperation in capacity-building enhancement, investment in energy-related industries and transportation systems, high tech-transfer, training of human resources and exchange of knowledge and information on all sources of energy will enable both sides to meet various challenges they are facing. I am sure that economic cooperation will contribute to the policies aimed at reducing the on-going tensions, building confidence among the states involved, and restoring peace and stability in both regions, ranging from the Atlantic Ocean to the Persian Gulf.

In our view, as a major oil and gas producer and in order to meet the challenge of energy security, we need a stable and predictable global market. We should focus on the efficient and sustainable development of all sources of energy. We need to facilitate the contribution of each source of energy to the global economy. And, we should support producers and investors’ efforts by ensuring a reasonable level of energy demand in the future.

In this line, I have to underline that energy security includes two dimensions of “demand” and “Supply.” As a major producer of energy resources, we believe that security of demand deserves adequate attention of the international community. This is an important factor to producers, as security of supply is to consumers. In order to reach some point of understanding, energy security should be regarded as a full circle.

I take the opportunity in this august forum to express my regret that, in response to all efforts for expanding cooperation and in spite of historic political, economic, and social relationships, Iran has become subject to unjust and unwarranted economic sanctions which are detrimental to the social and economic development of not only Iran, but also Europe and the other countries across the globe.

I hope that the new political atmosphere, triggered by the new government’s policy of moderation in the I. R. of Iran and the new EU leadership gestures, will restore good relationships between both sides and promote cooperation in all fields of mutual interest, including energy resources and related industries.

I thank you all.